The SARL-S is a simplified form of private limited liability company. It allows one or more natural persons, meaning individuals, to form a Luxembourg company with capital between EUR 1 and EUR 12,000.
That flexibility comes with limits. The activity must fall within the statutory scope, shareholders and managers must be natural persons, and capital cannot exceed EUR 12,000.
The SARL-S framework
The SARL-S has its own assets and liabilities. Shareholder liability is limited to contributions. That limit does not apply to a personal guarantee given by a shareholder. Nor does it remove a manager’s own liability for misconduct.
The company may have between 1 and 100 shareholders. All must be natural persons. Management is also reserved for natural persons, whether or not they hold shares.
An individual may hold shares in only one SARL-S at a time, except where shares are inherited. This does not prevent ownership of another company using a different legal form.
The SARL-S follows the ordinary tax regime for capital companies, such as the classic SARL. Its low starting capital does not create a special tax exemption.
Capital from EUR 1 to EUR 12,000
Capital must reach at least EUR 1 and may not exceed EUR 12,000. It is fully subscribed at incorporation, so the shareholders commit to the entire amount stated in the deed.
The Law of 18 May 2026, in force since 2 June 2026, allows payment of capital subscribed in cash to be deferred for up to 12 months. The articles of association set the payment terms. The articles or the incorporation deed may require a shorter period.
Contributions in kind, which consist of assets other than cash, must still be fully paid up at incorporation. The same applies to any share premium paid on top of the share capital. Shares issued later must be paid in full when issued. Deferral does not remove the shareholders’ commitment. Any unpaid amount remains due to the company.
Each profitable financial year, at least 5% of net profit is allocated to a reserve. This continues until capital and that reserve together reach EUR 12,000. Reaching that combined amount does not automatically convert the company into a classic SARL.
Eligible activities
The SARL-S is reserved for commercial, craft, industrial and liberal activities that fall within the scope of Luxembourg establishment law, which governs access to these activities. The official SARL-S overview explains this condition and who may use the form.
Pure holding activity, where the company simply holds shares in other companies, does not fit this framework. Financial services, asset management and other regulated activities also require a separate analysis of the legal form and applicable licence.
The SARL-S does not remove the need for a business permit. The application is filed before the company is registered with the Luxembourg Trade and Companies Register (RCS). The information received from the Ministry is included in the registration file. The final permit then requires registration of the articles with the RCS.
Incorporation by private deed
An SARL-S may be incorporated by private deed, meaning a document signed without a notary. This avoids the notarial deed required for a classic SARL. It does not, however, remove any mandatory content from the articles.
The deed covers the company name, activity, registered office, capital, shareholders, management and signature powers. It is then filed with the RCS and published in the RESA, the official electronic journal for companies and associations. Beneficial owners are declared to the Register of Beneficial Owners (RBE). They are the individuals who ultimately own or control the company.
The deed records the subscribed capital and the arrangements for paying it. Where payment is deferred, the company can be formed before receiving the cash. The amount must then be paid within the agreed period, which cannot exceed 12 months.
The difference from a classic SARL
Capital is not the only point of comparison. A classic SARL accepts legal entities as shareholders and managers. Its activity is not restricted by the SARL-S regime, and its capital may exceed EUR 12,000.
| Criterion | SARL-S | Classic SARL |
|---|---|---|
| Capital | EUR 1 to EUR 12,000 | EUR 12,000 minimum |
| Shareholders | Natural persons | Natural persons or legal entities |
| Manager | Natural person | Natural person or legal entity |
| Incorporation | Private deed permitted | Notarial deed |
| Activity | Limited by its own regime | Broader, subject to required permits |
A project expected to admit a company as shareholder, hold participations or organise a group therefore requires another legal form.
Conversion into a classic SARL
Conversion into a classic SARL allows capital above EUR 12,000 or the admission of a legal-entity shareholder. It should be organised before the company stops meeting the simplified regime’s conditions. However, a classic SARL cannot have more than 100 shareholders either, since the same limit applies to both forms.
The conversion requires a shareholder decision and a notarial deed. Capital and the articles are adapted, and the new situation is published. The RBE, business permit and other registrations are updated where relevant.
Revenue growth or the recruitment of an employee does not by itself trigger conversion. The precise cause matters, such as capital, activity or the arrival of a legal-entity shareholder.
Annual obligations
The SARL-S keeps accounting records, prepares annual accounts and has them approved. Filing with the RCS takes place within one month of approval and no later than 7 months after the end of the financial year.
The company also submits tax returns and, where relevant, VAT returns. An employer adds payroll and social-security declarations to its calendar.
Low initial capital does not reduce these recurring obligations. The main simplification concerns incorporation conditions and the use of a private deed.
Setting up a SARL-S or SARL
Discuss the company form suited to the business and the initial setup steps.
Frequently Asked Questions
What is the minimum capital of an SARL-S?
Capital ranges from EUR 1 to EUR 12,000 and must be fully subscribed at incorporation. Cash payment may be deferred for up to 12 months, on the terms set by the articles of association. The articles or the incorporation deed may impose a shorter deadline. Contributions in kind and share premium remain payable at incorporation.
Does an SARL-S require a notary?
No. It may be incorporated by private deed. Registration with the RCS and publication in the RESA are still required.
Can an SARL-S hire employees?
Yes. It then follows the same employer registration, payroll and labour-law duties as a classic SARL.
